TAM calculator: total addressable market

TAM is the total yearly demand for your type of product if every possible customer bought it: potential customers × what one pays a year.

The formula

TAM = potential customers × what one pays a year

Worked example: £240,000,000 a year

The example uses the guide's seed round, £200,000 for 20%, with a matching cap table, exit, fund and market.

200,000 customers × £1,200 = TAM £240.0m

Try it with your numbers

Work out your TAM

Until you type a figure, the results show an example business. Fill in only what you know: from then on every result uses your figures alone, and nothing you type leaves your browser.

Your deal numbers

Start with any one figure. Until you do, the results show the example business, whose figures are the grey hints in each box.

What this calculation uses

Potential customers (needed)

What one pays a year (needed)

Add more of your numbers

Open a group to fill it in. Everything you add shows up in the list below the calculator.

An investment offer

Investment offered

For this share of the company

Your round

Pre-money valuation

You can type 2m or 750k.

New investment

Shares in issue

Options already granted

Unallocated option pool

In shares. 0 if you have none.

Option pool wanted after the round

Your own shares

Money converting at the round

Amount converting

From an ASA, SAFE or loan note.

Valuation cap

Leave blank for no cap.

Discount

Interest a year (loan notes)

Months since the note was issued

A sale of the company

Sale price of the company

What the preferred investor put in

What the preferred investor owns

1x2x

Participating preference

What the founders own

An investor's return

Amount invested

Share bought

Later dilution

30 means later rounds shrink that share by 30%.

Sale price at the exit

Years to the exit

The next round

Share you own now

Size of the next round

Its pre-money valuation

Last round's post-money

New round's pre-money

A venture fund

Fund size (committed)

Paid in by investors so far

Invested in companies so far

Paid back to investors

Value of what the fund still holds

Your market

Share you can serve

Share of those you could win

A SEIS, EIS or VCT investment

Amount an investor puts in

Shares that vest

Shares or options granted

Vesting period

Cliff

Months worked so far

TAM for the example

Example

£240,000,000

a year

200,000 customers × £1,200 = TAM £240.0m

Formula: Potential customers × what one pays a year.

How to read your result

A bottom-up TAM is easier for an investor to check than a share of an industry report's total.

Watch out for

Count only customers who could really buy this product, not everyone in the sector.

Last checked 24 October 2026. Estimates only, not financial, tax or legal advice: check your accounts and documents, and take advice before you act. More terms in the startup glossary.